News Digest: April 29, 2013

Apr. 28, 2013 - 01:07PM
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HUD restructuring affects 900 employees

Nine hundred Housing and Urban Development Department employees may have to move or change jobs under a restructuring that will close 16 of 80 field offices by this fall.

“Nobody’s being laid off,” spokesman Jerry Brown said last week. All affected employees, about 10 percent of the workforce, are being offered jobs and will be eligible for moving assistance. They can also take advantage of early retirement or buyouts worth up to $25,000.

The restructuring, the department’s largest since the late 1990s, comes as its organizational model no longer works “from a financial and a service delivery point of view,” HUD Deputy Secretary Maurice Jones said in an overview of the planned changes. The restructuring is not related to fiscal 2013 budget cuts stemming from the sequester.

As part of the reorganization, HUD’s Office of Field Policy and Management will shutter the 16 offices in locales such as Lubbock, Texas; Fresno, Calif.; and Grand Rapids Mich. After the downsizing, every state will still have at least one field office, according to HUD.

Starting this fall, the department also plans to consolidate staff in the multifamily housing program that provides mortgage insurance to HUD-approved lenders. Those employees are scattered in 50 offices around the country; by 2016, the department will reduce that number to 10.

Sequester threatens DARPA research spending

Seeing defense budget cuts, the head of the Defense Advanced Research Projects Agency is warning of the need to protect research spending.

“We believe we may be at the beginning of a fundamental shift in how our society allocates resources to the business of national security. I’m not talking today about the immediate issues around sequestration,” DARPA Director Arati Prabhakar told reporters last week.

With increasing reliance on technology and fiscal pressures facing the national security apparatus, Prabhakar spoke of DARPA’s importance. “In the complex world that we’re living in today, we need what DARPA does more than ever,” she said.

Couple charged in State Dept. fraud scheme

Federal prosecutors in Virginia filed charges against a former State Department contract specialist and her husband last week, accusing them of using the proceeds of a multimillion-dollar contract scam to buy three properties, a Steinway piano and a yacht.

The U.S. Attorney’s Office for the Eastern District of Virginia also filed court papers seeking paintings, jewelry and more than $50,000 in cash seized from two bank accounts — all tied, the prosecutors say, to a contract scheme in which Kathleen McGrade helped award more than $40 million in heating, ventilation and air conditioning work from 2008 to 2011 to a company owned and operated by her husband.

McGrade was fired when news of the contract scandal surfaced in 2011. She and her husband, Brian Collinsworth, each face up to 20 years in prison if convicted, according to prosecutors. Attempts to reach McGrade were unsuccessful.

In forfeiture papers filed in U.S. District Court in Alexandria on April 2, prosecutors said McGrade was “involved in nearly ever stage of the contracting process,” including approving invoices to her husband’s company, the Sterling Royale Group.

Both McGrade and Collinsworth concealed their relationship from the State Department, according to prosecutors’ April 2 filing.

GAO asked to study federal pay system

The House Oversight and Government Reform Committee on April 18 asked the Government Accountability Office to take a closer look at how the General Schedule pay system might be modernized.

Chairman Darrell Issa, R-Calif.; ranking Democrat Elijah Cummings of Maryland; and federal workforce subcommittee Chairman Blake Farenthold, R-Texas, said in a letter to Comptroller General Gene Dodaro that the committee is studying the 64-year-old GS system and whether it is an appropriate way to compensate the modern federal workforce.

“The GS system was developed in 1949, when more than 75 percent of federal workers held clerical positions in grades GS 7 or below,” the letter said. “Much has changed since that time, including the nature of agency work.”

Northrop subject to False Claims Act suit

Northrop Grumman faces a False Claims Act lawsuit stemming from its handling of a U.S. Postal Service automation project worth about $900 million, the Virginia-based contractor disclosed in its latest quarterly report with the Securities and Exchange Commission.

In the report, the company said it received Justice Department notification this month of the suit, which was filed under seal in mid-2011 in federal court in Virginia and alleges that Northrop violated the False Claims Act in “a number of ways,” with damages to the Postal Service of about $179 million annually. The suit seeks a partial refund of the purchase price for the 100 sorting systems that process magazines, catalogs and other pieces of flat mail.

Northrop, which said it will defend itself “vigorously,” sued the Postal Service last year over the project, saying the mail carrier added new requirements and violated the terms of the 2007 fixed-price contract.

USPS attorneys dispute those allegations; that suit is pending in the Court of Federal Claims in Washington.

IG finds $13.6B in IRS improper payments

The Internal Revenue Service made up to $13.6 billion in improper payments to low-income taxpayers through its Earned Income Tax Credit Program in fiscal 2012, according to a Treasury Inspector General for Tax Administration report released last week.

The IRS estimates that 21 to 25 percent of its EITC payments were issued improperly, down slightly from fiscal 2011, when an estimated 21 to 26 percent were improper.

The IRS has made little improvement in reducing the improper payment rate, according to TIGTA.

The IRS “will continue to work hard to get the credit to those who are eligible while protecting against improper payments,” spokes-man Anthony Burke said.

Lawmakers seek quicker property disposal

Lawmakers last week pressed the General Services Administration to more quickly dispose of vacant buildings.

Rep. John Mica, R-Fla., chairman of the House Oversight and Government Reform subcommittee on government operations, complained at a hearing that many unused federal facilities sit vacant for years before being sold or disposed of, and he pushed GSA to set clearer timetables for its property disposal projects.

The hearing was held at an abandoned federal warehouse in southeast Washington. The $19 million, 32,000-square-foot warehouse has been vacant since 2009, costing $70,000 annually to maintain.

Michael Gelber, acting deputy commissioner at GSA’s Public Buildings Service, said the agency works as quickly as possible to dispose of unneeded federal properties.

GSA disposed of 114 excess properties in fiscal 2012 and more than 750 in the last five years and continues to evaluate its portfolio for excess property, Gelber said.

Justice files suit against Lance Armstrong

The federal government filed a 28-page complaint against Lance Armstrong last week that details several years of lying, cheating and manipulating by the former cyclist for the sake of winning and financial reward.

According to the complaint, Armstrong earned a $17.9 million salary as a cyclist from 1998 to 2004 — much of it paid by the U.S. Postal Service’s $40 million agreement to sponsor Armstrong’s team.

By filing the complaint, the Justice Department followed through with its announced plan in February to sue Armstrong, his cycling team’s management company and Johan Bruyneel, his manager. The suit accuses them of civil fraud.

“The defendants … made false statements, both publicly and directly to the USPS, that were intended to hide the team’s misconduct so that those invoices would be paid,” said the complaint obtained by USA Today.

Under the False Claims Act, the government could receive triple the damages it proves at trial, possibly the $40 million sponsorship amount times three.

Armstrong’s attorneys claim the six-year statute of limitations should void most of the suit.

“The DOJ’s complaint against Lance Armstrong is opportunistic and insincere,” Armstrong attorney Elliot Peters said in a statement. “The U.S. Postal Service benefited tremendously from its sponsorship of the cycling team.”

DFAS rolls out security upgrades for myPay users

Upgrades to the Defense Finance and Accounting Service’s online payment management system, called myPay, will require 4.5 million account holders to create more complex login passwords starting next month.

The changes are being implemented to meet Defense Department security standards and protect users’ identity and personal information.

DFAS pays all Defense Department military and civilian personnel, retirees and annuitants, as well as major DoD contractors and vendors, according to the agency’s website. DFAS also supports the Energy, Veterans Affairs and Health and Human Services departments, among others.

Performance chief to leave OMB

Shelley Metzenbaum, associate director of performance and personnel management at the Office of Management and Budget, is stepping down May 3.

During her 3½-year tenure, Metzenbaum was the lead on the Obama administration’s efforts to improve agency performance and the website performance.gov.

CFC charity pledges fell 6 percent last year

Combined Federal Campaign pledges fell to $257.2 million in 2012, down almost $15 million — about 6 percent — from the preceding year, according to new federal figures.

The total represents the third straight yearly drop for the troubled workplace charity drive; the numbers are the lowest since at least 2004, when pledges amounted to $256.9 million.

Participation by civilian federal employees and military personnel was down even more sharply in last year’s campaign; contributors for the 2012 season numbered about 848,200 in 2012, or almost a 12 percent drop from 2011.

The 2012 figures were provided to the CFC campaigns April 19 by the Office of Personnel Management, which oversees CFC, and obtained by Federal Times.

Of the 10 largest campaigns, pledges fell at seven, the OPM data numbers show.

Charity drive for victims of marathon bombing

The Boston Federal Executive Board wants to set up a special one-time charity drive to allow federal employees to donate to victims of the marathon bombing and their families.

The Office of Personnel Management said it expects to decide soon on the FEB’s request for permission to launch the solicitation, which would be separate from the government’s Combined Federal Campaign fundraising.

Under one-time solicitations, agencies can choose a charity or charities involved in relief efforts and collect donations for them. OPM last authorized a special solicitation in November, after Superstorm Sandy.

Lawmaker: Postal reform bill coming ‘very soon’

A key lawmaker plans to introduce comprehensive postal legislation soon, with hopes for final passage by October.

“I think we’re close,” Rep. Darrell Issa, R-Calif., said at an April 17 hearing of the House Oversight and Government Reform Committee. Asked afterward when he would proceed with a bill, Issa, the committee’s chairman, said only “very soon.”

While lawmakers’ previous predictions of progress on a comprehensive bill have not panned out, one mail industry representative said the four-hour hearing left him optimistic.

“I got a clear sense that [Rep. Elijah Cummings of Maryland, the committee’s top Democrat] and Issa were more than willing to work together, that they both have come to the point in time where they realize something needs to be done,” said Gene Del Polito, president of the Association for Postal Commerce, a trade group of businesses that rely heavily on the mail.

Sen. Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs Committee, also hopes to proceed soon with a bill, a spokeswoman said later via email.